Sprint Swaps Flash Market Doubts Over Fate of T-Mobile Tie-Up

  • CDS costs on company debt have doubled since September
  • Sprint may need capital injection if deal fails, analyst says
Photographer: Jeenah Moon/Bloomberg
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Sprint Corp. bondholders have long bet that the wireless company’s acquisition by T-Mobile US Inc. will be allowed to go through, but by at least one measure, they’re growing more worried about the deal’s potential to get done.

The cost to protect Sprint’s debt against default for five years has nearly doubled since September to around 333 basis points, according to ICE Data Services. Credit traders have been digesting court testimony from a takeover challenge brought by Democratic attorneys general. The attorneys, who hail from 13 states and the District of Columbia, say the merger could lead to higher prices and poorer service for consumers. Closing arguments in the case are scheduled for Wednesday.